Ohio Maintains That Utilities Should Be Able to Offer Alternative Retail Generation Rates, Tweaks Other Default Service Rules

The Public Utilities Commission of Ohio affirmed in a rulemaking relating to the filing requirements for electric security plans that electric distribution companies should be permitted to offer alternative retail generation rates, such dynamic pricing or time-based generation rates, as part of default service (Case No. 13-2029-EL-ORD).

Furthermore, any electric security plan filings must include consideration of such dynamic pricing or time-based generation rates, though EDCs are not required to propose such rates.

The FirstEnergy EDCs had proposed eliminating the requirement that utilities be compelled to consider time-based generation rates in their ESP filings, arguing that retail suppliers should be responsible for offering time-based generation rates.

PUCO, in a final order issued yesterday, disagreed, noting that until the competitive retail electric market develops to the point where a reasonable number of competitive retail providers are offering time-differentiated rates, "the EDUs should continue to offer pilot time-differentiated rate programs."

"We note that time-differentiated rates are just one example of many alternative retail rate options included in the rule," PUCO said.

In a separate rulemaking (Case No.l2-2049-EL-ORD), FirstEnergy Solutions had also proposed deletion of a requirement for a utility to bill customers for generation on a time-differentiated basis, citing the development of the retail market. For the same reason, PUCO denied this request, stating that, at this time, time-differentiated generation rates should not be the exclusive domain of retail suppliers.

PUCO adopted a proposal from the Ohio Consumers' Counsel to require the EDCs, as part of their ESP filings, to provide a listing of retail rates that would result from the competitive bid plan (if used). If necessary, the EDC should rely on projections of future market rates to determine the retail rates.

PUCO also adopted Direct Energy's recommendation that the rule should require electric utilities to indicate whether their application to increase or decrease a component of the ESP is for a bypassable or nonbypassable component